The precious metal had a stellar February and made an impressive start to the current month, which culminated to last week's 19-month highs (2,070), mainly driven by the risk-aversion sparked by the war in Ukraine and the retaliatory sanctions levied against Russia by Western countries.
The current week however, started with optimism in regards to the negotiations between Russian and Ukraine, with Ukrainian President Zelenskyy saying that negotiations with Russia are going "pretty good" and that they "will continue tomorrow", meaning March 15.  Despite those comments, the discussions have not produce any breakthrough so far.
Market participants also prepare for the monetary policy decision by the US Fed, which will be announced on Wednesday. The US central bank has pointed to its first rate increase since 2018, in order to combat high inflation, which is exacerbated by the situation in Ukraine and the surge in energy prices.
The outcome of the Fed's meeting will likely determine the next leg of Gold's move and caution is needed as the decision has many components, from the rates to the dot-plot and Mr Powell's press conference.
On the technical front, XAU/USD fell short of setting new record highs last week (current at 2,075) and has since then been retracing, weighed by some optimism seen recently around Ukraine and the Fed's expected lift-off.
Today it runs its third straight negative day and threatens key technical level, at the broader 1,925-1,908 region, which includes the 50% Fibonacci of the 2022 High/Low rise and the EMA200.
Daily closes below this area would shift near-term bias to the downside and could open the door to a drop towards the ascending trend-line from this year's lows (currently at around 1,845).
On the other hand, the Relative Strength Index (RSI) points to oversold levels, with the lowest readings since late January. As such, it may be able to find renewed vitality and return above 1,959, but a catalyst will be needed for bigger gains towards and beyond 1,992-2.000.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.